They've done the same thing to me in the past. I had to call once and argue - vehemently - to get them to apply my coupon to a different item when they cancelled part of my order. The also cancelled the coupon, instead of applying it to the next most expensive item. I've been boycotting Joann's for four months now. It was a hard habit to break, but well worth it in cutting down on aggravation in my life.
I feel your pain.